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Reviving Cap and Trade – The Sunstein Also Rises

Posted on November 22 2010 12:00 pm

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Glenn Beck has many times asserted, not unpersuasively, that Cass Sunstein is the most dangerous man in America. Sunstein is Obama’s “Regulatory Czar” and the co-author of Nudge: Improving Decisions About Health, Wealth, and Happiness, basically a blueprint for incrementally moving a population towards more enlightened behavioral decisions (as determined by the likes of Dr. Sunstein) through the “stick-and-carrot” inducements of regulation.

“We think that it’s time for institutions, including government, to become much more user-friendly by enlisting the science of choice to make life easier for people and by gently nudging them in directions that will make their lives better,” they wrote.

“…The human brain is amazing, but it evolved for specific purposes, such as avoiding predators and finding food,” said Thaler and Sunstein. “Those purposes do not include choosing good credit card plans, reducing harmful pollution, avoiding fatty foods, and planning for a decade or so from now. Fortunately, a few nudges can help a lot. …”

In the highly unlikely event he didn’t have an actual hand in it, Sunstein would doubtless applaud the EPA’s latest nudge in pursuit of de facto Cap and Trade entitled PSD and Title V Permitting Guidance for Greenhouse Gases.

Rich Trzupek, in his article “Cap and Trade Returns” describes it thus:

[It will] serve as the blueprint for a sweeping new power grab by [the EPA], one that neatly avoids the tiresome and time-consuming requirements that a piece of legislation duly passed by Congress would impose on the EPA.

Trzupek, who’s obviously well-qualified to discuss such things, explains why something as supposedly innocuous as a “guidance document” conceals much greater import.

The fact that it is a guidance document, as opposed to a formal regulatory proposal, is very significant. Regulations have to be proposed in certain forms, economic costs have to be considered, and there is a long, detailed public process involved. Guidance, on the other hand, isn’t subject to any of these sorts of annoying requirements. Guidance is the EPA offering its “opinion” on a subject and, when the criticism begins, Jackson will surely hide behind this accurate, but ultimately deceptive, detail. Few states outside of Texas will ignore EPA guidance, for such a document is traditionally treated as Holy Writ by state and local agencies. After all, their permitting decisions are ultimately subject to the EPA’s approval. How can a state regulator expect to have a decision approved by the overseeing federal authority if he or she ignores federal guidance?

Another way of thinking of this – and again I’m grateful to Dr. Sunstein for providing just the right euphemism – is “altering the choice structure”.

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